Which Buy-Side Institutions Participate in Public Earnings Conference Calls? Implications for Capital Markets and Sell-Side Coverage

50 Pages Posted: 15 Feb 2016 Last revised: 7 Jun 2018

See all articles by Andrew C. Call

Andrew C. Call

Arizona State University (ASU) - School of Accountancy

Nathan Y. Sharp

Texas A&M University - Department of Accounting

Thomas Shohfi

Rensselaer Polytechnic Institute (RPI) - Department of Finance and Accounting

Date Written: April 25, 2018

Abstract

The Q&A session of public earnings conference calls represents a unique opportunity for stakeholders to interact with senior management. We examine buy-side analysts’ participation on these calls and the associated capital-market implications. Using 81,000 transcripts for 3,300 companies from 2007 to 2016, we find that buy-side analysts ask questions on approximately 18% of calls. Management prioritizes buy-side analysts but discriminates against analysts from hedge funds when short interest is high. Relative to sell-side analysts, buy-side analysts’ interactions with management are shorter and exhibit less favorable tone and greater uncertainty about the firm’s future prospects. Buy-side analysts’ activity on public conference calls is also associated with increases in information asymmetry and reductions in sell-side activity.

Keywords: buy-side analysts, earnings conference calls, institutional investors, hedge funds, sell-side analysts, tone

JEL Classification: G10, G20, G23, G24, G29, D82, M41

Suggested Citation

Call, Andrew C. and Sharp, Nathan Y. and Shohfi, Thomas, Which Buy-Side Institutions Participate in Public Earnings Conference Calls? Implications for Capital Markets and Sell-Side Coverage (April 25, 2018). Available at SSRN: https://ssrn.com/abstract=2731930 or http://dx.doi.org/10.2139/ssrn.2731930

Andrew C. Call (Contact Author)

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

Nathan Y. Sharp

Texas A&M University - Department of Accounting ( email )

4353 TAMU
College Station, TX 77843-4353
United States
979-845-0338 (Phone)

Thomas Shohfi

Rensselaer Polytechnic Institute (RPI) - Department of Finance and Accounting ( email )

Pittsburgh Building
110 8th street
Troy, NY 12180
United States

HOME PAGE: http://shohfi.com/

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